Two Recent Victories Significant for Defendants in New Jersey Legal Mal Cases
Within the last two months, Goldberg Segalla partner Matthew S. Marrone scored significant victories in two legal malpractice cases in New Jersey, highlighting the extraordinary capabilities of the firm’s Management and Professional Liability Practice Group.
New Jersey is a notoriously difficult place to defend attorneys in legal malpractice cases. Successful plaintiffs are entitled to an award of attorneys’ fees and costs, and the body of existing case law is generally less favorable to lawyers than in other jurisdictions. Victories like these are rare, and they are extremely significant because they help to reverse those trends and even the playing field for the legal community.
First, in the Superior Court of Morris County, Matt took the case of Equity Now v. Hosbach to trial, where he secured a defense jury verdict. The verdict is particularly notable because his client had already been found negligent as a matter of law before trial.
The case involved a lender (the plaintiff, which was the attorney defendant’s underlying client) who lent money to a borrower, to be secured by a mortgage on real property in Ocean County, New Jersey. The lawyer incorrectly recorded the mortgage in Morris County. The borrower subsequently defaulted on the loan, and then sold the property without the mortgage being satisfied.
At trial, Matt argued that the lender and a co-defendant title agent were both also negligent in failing to detect the incorrectly recorded mortgage, and that these other two parties should share the majority of the blame. The jury found all three (lawyer, lender, title agent) to be responsible. Matt tried to convince the jury that his client should only be 5 percent responsible, with the other two sharing the remaining fault. The jury determined that the lawyer was only 2 percent responsible, and that the lender was 51 percent at fault, which resulted in a no cause for the lender.
This was a very surprising verdict to all parties (and the judge), particularly in light of existing New Jersey law, which generally prohibits a client from being comparatively negligent in the context of an attorney-client relationship. Matt convinced the trial judge that this case presented an exception to this general New Jersey law. The judge agreed and allowed the jury to make a finding of comparative fault, which resulted in the defense verdict. The plaintiff declined to appeal, and judgment was entered in favor of the attorney.
Next in a case that received national and regional coverage from Law360 and the New Jersey Law Journal, Matt convinced the Appellate Division to affirm the entry of summary judgment he previously secured for his client in the Superior Court of Atlantic County in the case of Sheppard v. Perskie. In that case, the plaintiff argued that Matt’s client should be liable under a novel theory of “negligent attorney referral,” which had not previously been recognized in New Jersey.
Matt’s client agreed to represent the plaintiff in a serious motor vehicle accident case, but subsequently determined that a conflict of interest would prohibit him from handling the case, so he referred the plaintiff to another lawyer, who filed suit on behalf of the plaintiff. The other lawyer failed to sue the party who was ultimately found to be at fault for the accident, and the plaintiff subsequently sued both attorneys for malpractice. In relevant part, the plaintiff claimed that our client negligently referred him to a lawyer who was not qualified to handle the case.
Matt convinced the trial court to enter summary judgment in favor of his client, as this is not a recognized cause of action in New Jersey. The Appellate Division affirmed, and specifically declined to recognize a cause of action for “negligent attorney referral” in New Jersey.
Learn more here:
- Perskie opinion
- “NJ Law Firm Not Liable For ‘Negligent Referral,’ Panel Says,” Law360, June 26, 2018 (subscription required)
- “‘Negligent Referral’ Not Actionable, Appellate Division Says in Legal Mal Case,” New Jersey Law Journal, June 28, 2018 (subscription required)